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One-Third Of Fidelity's 401(k) Customers Are All-In On A Target Data Fund
I'm betting that (through no fault of Fido) a very high percentage of those accounts chose target-date allocations our of sheer laziness, ignorance, or inertia. What could be easier about investing? Just set the dial on the target date and forget the whole thing. At least there's a bit of diversity in the allocation, and it's sure a lot better than doing nothing at all. I hope that it actually works out OK for them.
Reply to @Ted: Yes, I saw the tip from Anna... glad that it worked for you. Another hint: If there's something that you are trying do do on a computer, and it seems that it should be something that's easy to do (that lots of other folks would probably want to do also) don't be afraid to try different key combinations: right or left mouse buttons, option key and control key. Chances are very good that the computer can do exactly what you want, and you'll find lots of cool stuff that way. Also, always check your "preferences"- often lots of configuration options are listed there.
I'm not sure how much one can read into a statement or data point like that when you have little or no other knowledge of what or where they might have investments elsewhere. There's also the off chance that the customers 401k's have few options as well
Sorry if I am in a minority but I think this is a good thing. Investing is not so easy and while Fido certainly does not have the best target funds the great majority of people with 401k funds are unlikely to outperform an appropriate target fund. I think the closest thing one can get to a defined benefit plan these days is mandatory target fund investments of 7+ % with a decent match by the employer.That at least should result in at least a fair retirement.
I've helped many people out with their 401k's and believe me the allocation I walk into most of the times is downright frightening.
I'm not saying that target date funds are the best, but when you see someone with an allocation of 30% in a bond fund, 40% in a MMA and 30% in company stock because it was "safe" and its been that way for who knows how long...target date funds aren't that bad.
And the more automatic enrollment into 401k's there is, the more there'll be in target date funds since that's the default for most plans.
Comments
I'm betting that (through no fault of Fido) a very high percentage of those accounts chose target-date allocations our of sheer laziness, ignorance, or inertia. What could be easier about investing? Just set the dial on the target date and forget the whole thing. At least there's a bit of diversity in the allocation, and it's sure a lot better than doing nothing at all. I hope that it actually works out OK for them.
Regards,
Ted
OJ
Regards,
Ted
Regards- OJ
I'm not saying that target date funds are the best, but when you see someone with an allocation of 30% in a bond fund, 40% in a MMA and 30% in company stock because it was "safe" and its been that way for who knows how long...target date funds aren't that bad.
And the more automatic enrollment into 401k's there is, the more there'll be in target date funds since that's the default for most plans.